Best Buy (BBY) shares tumbled 17% in the first minutes of trading on Tuesday despite a better than expected third quarter. However, the company’s gross margin fell slightly compared to the same period last year, and its softer-than-expected sales forecast for the current period highlights supply chain squeezes.
The electronic retailer is forecasting comparable sales for the fourth quarter in the range of -2% to +1%.
During the earnings call with analysts, Best Buy CEO Corie Barry noted the company is facing higher costs because of supply chain issues. She also emphasized Best Buy is confident it can handle holiday demand.
The company’s gross margin fell slightly to 23.5%, compared to 23.6% a year ago. The decrease is not major, but highlights the pressure on companies to balance their prices amid high inflation.
Third quarter revenue was $11.91 billion with adjusted earnings of $2.08 per share. Both metrics came in above analyst expectations.
Same-day deliveries were a hit for the company during the third quarter.
“During the third quarter, we reached our fastest small-package online shipping times ever as our same-day delivery was up 400% and we nearly doubled the percent of products delivered within one day compared to last year,” Barry said in the company’s earnings release.
The stock was up 38% year-over-year prior to Tuesday’s sell-off.
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